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The Journal of Management Consulting, volume 10, number 2, November 1998

Creating an Environment for Successful Projects

Robert J. Graham and Randall L. Englund (Jossey-Bass, San Francisco; 1997) $32.95

Reviewed by John D. Trudel CMC

The title of this book misleads. Project management methods (also called Program management) come from the government sector. Most of what we hear at project management conferences is about control, justifying efforts, allocating responsibility and blame, and fast cycles. The grand triumph of project management was the USA's program to put a man on the moon. The dark side of project management is grim bureaucracy, failed programs, and cost overruns. Eastern Europe was run by centrally controlled programs. So is the U.S. Postal Service. This book is not about managing those kinds of projects; its methods will not help fix the U.S. Internal Revenue Service or improve road maintenance. Rather, this book is about developing new commercial products. It is interesting writing by two seasoned, competent professionals who helped do that for one of the best firms in the world, Hewlett-Packard.

The innovation and engineering portions of new product development are unique. After all, we only get to invent a new technology once. Because Industrial Age business was about standard products and incremental refinement, most corporations have little experience managing innovation, and few are good at it. To make matters more difficult, champions of new products are typically mavericks; they have difficulty fitting into standard corporate routines. As a result, many large businesses are ringed with spinoffs founded by employees who left to develop the new products their employers failed to develop.

Hewlett-Packard is one of the best I know at new product innovation. It succeeds in part by framing new product development as project management, and then managing those projects well. The authors of this book say "Reengineering involves reexamining what the organization is doing and striving to do it better. Project management is about what the organization is going to do; it represents the future, not the present." The need exists to develop infrastructure that allows doing a wide diversity of new product development projects consistently well. This book takes the practices of a truly excellent company, Hewlett-Packard, and some practices from General Electric, and shows how they might be applied to develop and maintain steady growth with new products.

The authors describe what others have achieved, and they tell how to get started. Yet, I find the book's best content not in what or how, but in why. The book is rich with examples of why typical management behavior interferes with new product development. It clearly explains why upper managers are fearful, why corporate communications are so often poor, and, yes, how to fix such things. The goal is to give project managers the freedom, training, and support to run rather autonomous and effective new product development programs.

The methods work well for Hewlett-Packard, but may not for many companies, probably because innovation does not lend itself to standard solutions. Also, most firms -- even, most large, multinational firms -- are light-years away from the sophisticated management at Hewlett-Packard. Indeed, there is a huge gap between Hewlett Packard and the norm.

Studies report that 21 percent of US, manufacturers spend nothing on research and development. Investment in R&D has, on average, been declining in most all companies. The top 200 companies in the United States have been flat in sales and eagerly downsizing for years. Most managers are far more concerned with making their numbers this quarter than with long term growth. Hewlett-Packard, on the other hand, gets well over half its sales from products under me years old, and its sales are by no means flat.

Yet, if we were retained as management consultants to renew an organization and its products, we would not start with project management or new product development. We'd start at a much higher level, because profitable growth takes vision, leadership, top management commitment, strategy, and a culture that supports investment in change and innovation. Hewlett-Packard has wise leadership, and it invests in innovation. Without that kind of leadership, attempts to improve organizations by delivering a flow of new products will fail.

Late in the book, the authors caution, "If you are not able to get top management support, simply wait." They predict failures will grow and sales will decline. "Then a new CEO will be appointed who will no doubt trumpet the virtues of project management, and you will then have senior management support."

I admire optimism, but that prediction is naive. More likely, CEOs, trying to save their jobs, will bring in the accountants and replace expensive product development professionals with reengineered processes and cheap labor. When that fails to produce profitable growth, as it always does, those who replace those CEOs may well take a chainsaw to the organization -- and often mortally wound the business in the process.

So, this book is probably best for those who are already successful and committed to growth through new product development. They can learn a lot here, and profit from it. The rest, I fear, will not be changed -- despite irrefutable evidence that innovation and new product development are essential in every business, and cannot be left to chance. They must be managed, and managed well.

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